I-Bhd to ride on urbanisation of outer Klang Valley

PETALING JAYA: Property developer I-Bhd is in prime position to profit from the urbanisation of the outer Klang Valley region despite challenges in the property market, said PublicInvest Research.

The research house reaffirmed its “outperform” call on the counter with an unchanged target price of 91 sen.

“We continue to like I-Bhd’s value proposition and attractive locations, and see it still being in prime position to benefit from the urbanisation of the outer Klang Valley region (Klang and Shah Alam) despite ongoing challenges in the property market.

“With less than 25% of its gross development value (GDV) crystallised, I-Bhd’s story is only just unfolding,” it said in a report.

PublicInvest Research noted that I-Bhd’s numbers for 2016 had come in below its expectations, with revenue and net profit at only 76% and 78% of its full-year estimates.

It said this was partly due to some construction delays, which hampered billing progress, and also the slower rate of approvals for mortgage loans.

“While we conservatively lower our financial year 2017 (FY17) and FY18 revenue expectations between 13% and 15% to account for changes in our billing assumptions, net profits are adjusted to a lower 5% to 7% on account of better margins,” it said.

The property developer had recorded a 49% jump in revenue for the year to RM383.6mil, underpinned by contributions from its property development segment, which was up 70.4% year-on-year.

Net profit recorded a stronger 59.4% year-on-year growth to RM66.6mil as margins improved.

“The property investment segment remains a work-in-progress, however, with its current performance affected by the expiry of its Ijarah agreement with Al-Rajhi Bank in late 2015.

“A decrease in visitor count to the theme park affected performance in the leisure segment,” the research house added.

The group’s i-SOHO and i-Suite developments have been fully taken up, while the Liberty and Parisien Towers projects have achieved an average of 80% sales.

The Hyde Towers project, launched last year, is close to being half sold.

Unbilled sales are at RM573.3mil, with new sales of RM333mil recorded during the year, against an estimated RM350mil in 2015.

“This consistency bears testament to its product value and the market segment it serves, which is still seeing demand,” it said.

On the group’s upcoming launches, the research house noted that a 19-storey, 204-unit fully-furnished residential development project sited above the DoubleTree by Hilton hotel dubbed “Converse @ i-City” is slated for launch in the second quarter of 2017.